Health financing for universal coverage

Universal coverage - three dimensions

The path to universal coverage involves important policy choices and inevitable trade-offs. The way that pooled funds – which can come from a variety of sources, such as general government budgets, compulsory insurance contributions (payroll taxes), and household and/or employer prepayments for voluntary health insurance - are organized, used and allocated, influences greatly the direction and progress of reforms towards universal coverage.

Critical decisions countries must face

Pooled funds can be used to extend coverage to those individuals who previously were not covered, to services that previously were not covered or to reduce the direct payments needed for each service. These dimensions of coverage reflect a set of policy choices about benefits and their rationing that are among the critical decisions facing countries in their reform of health financing systems towards universal coverage. Choices need to be made about proceeding along each of the three dimensions, in many combinations, in a way that best fits their objectives as well as the financial, organizational and political contexts.

Three dimensions to consider when moving towards universal coverage

Extending the coverage from pooled funds along the three dimensions calls for health financing reforms and actions leading to an increase of available funds for health, to an increase in the share of these funds collected through prepayment and the arrangements for pooling them, to efficiency gains and to upholding and increasing the quality of health services.

In the section on country developments, more can be learned on the technical and political choices countries have taken in order to expand coverage along the three dimensions.